Ansbacher benefits from cutting equities
A decision to cut its clients’ exposure to equities at the beginning of the year has helped UK wealth manager Ansbacher outperform private client indices for some of its funds.
Ansbacher’s sterling cautious portfolio has performed strongly in the first quarter this year, outperforming the Asset Risk Consultants’ sterling cautious index by 4.6%. For the first six months of the year, the wealth manager’s cautious model portfolio was up 3.9%.
ARC’s reports are viewed as independent by wealth managers and are seen by the industry in the UK as one of the best guides to investment performance.
Mike Hollings, chief investment officer at Ansbacher, said: “A move out of equities earlier this year helped to underline the performance of our model portfolios.”
He added: “Currently the portfolio has between 45% to 50% of assets in hedge funds, 25% to 30% in cash and the rest in structured products, and only a small amount in equities.”
Over a three-year period up to March this year, Ansbacher’s sterling cautious, growth, and balanced portfolios were all in the upper left-hand corner of the ARC private client Sharpe chart, which measures return verses risk.
Most fund managers strive to achieve high returns, but at the same time minimise risk for their portfolios. The closer the performances of their portfolios are to the upper-left hand corner of a Sharpe chart, the better their performance.
The ARC report said Ansbacher’s model portfolios outperformed many of its peers during the three year period including GAM, Barclays Wealth, Merrill Lynch and JP Morgan Private Bank.
Hollings said Ansbacher follows a top-down asset allocation approach to investment. He also believes his experience working on the convertible bonds desks of Morgan Stanley and BNP Paribas has helped with constructing investment portfolios.
He said: “The background in converts helps us manage risk more effectively on client portfolios because it helps us recognise the value of looking after downside risk. The deal with convertibles lies with being prepared to sacrifice some upside participation in return for reducing downside risk.”
Ansbacher, which was acquired by the Qatar National Bank in 2004 and can trace its history back to 1894, has about $1bn (€631m) of assets under management.
Hollings: top-down approach
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